Types of forecasting - Assessment

All of the following are assumptions underlying the validity of linear regression output except
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Certainty.
A decision maker is operating in an environment in which all the facts surrounding a decision are known
exactly, and each alternative is associated with only one positive outcome. The environment is known as
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Certainty.

A company uses two major material inputs in its production. To prepare its manufacturing
operations budget, the company has to project the cost changes of these material inputs. The
cost changes are independent of one another. The purchasing department provides the
following probabilities associated with projected cost changes:
Cost Change Material 1 Material 2
3% increase .3 .5
5% increase .5 .4
10% increase .2 .1

The probability of 3% increase in the cost of both Material 1 and Material 2 is

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15% (i.e., 30% x 50%)

The El Kulagtit Company has two products, Product X and Product Y, that it manufactures though
its production facilities. The contribution margin for Product X is P15.00 per unit, whereas
Production Y’s contribution is P25.00. Each product uses Materials A and B. Product X uses 3
pounds of Material A and Product Y used 6 pounds. Product X requires 6 feet of Material B and
Product Y uses 4 feet. The company can only purchase 600 pounds of Material A and 880 feet of
Material B. The optimal mix of products to manufacture is
Product X Product Y
120 units 40 units

Linear programming - Assessment

The El Kulagtit Company has two products, Product X and Product Y, that it manufactures
though its production facilities. The contribution margin for Product X is P15.00 per unit,
whereas Production Y’s contribution is P25.00. Each product uses Materials A and B. Product
X uses 3 pounds of Material A and Product Y used 6 pounds. Product X requires 6 feet of
Material B and Product Y uses 4 feet. The company can only purchase 600 pounds of Material
A and 880 feet of Material B. The optimal mix of products to manufacture is
1) Product X
2) Product Y
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1) 120 units 2) 40 units
A quantitative technique used for selecting the combination of resources that maximized profits or
minimized costs is
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Linear programming.
A limiting constraint is expressed in the
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Slack variable

Dynamic programming - Assessment

A company is designing a new regional distribution warehouse. To minimize delays in loading and unloading
trucks, an adequate number of loading docks must be built. The most relevant technique to assist in
determining the proper number of docks is
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Queuing theory.

The network below describes the interrelationships of several activities necessary to complete
a project. The arrows represent the activities. The numbers between the arrows indicate the
number of months to complete each activity.

The shortest time to complete the project is

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8 months.

Valor Company produces a component of a machine. The target value for a key dimension of the
component is 100 millimeters (mm). The quality loss per unit if the key dimension is measured at
precisely the upper or lower specification limit (100mm + 1 mm) is estimated to be P10.00. The
following are the measures of a sample of four units:
Unit Measurement
1 99
2 101
3 99.5
4 100.5

Valor Company produces 1,000 of the components. Based on the sample, the estimated quality loss is

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P6,250

An organization has collected

data on the complaints made by
personal computer users and has
categorized the complaints, as
follows:
Using the information collected, the organization should focus on
The number of computer complaints associated with the lack of user knowledge and hardware problems.

When using PERT, the expected time for an activity when given an optimistic time (a), a pessimistic time (b)
and a most likely time (m), is calculated by which one of the following formulas?
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The formula used in determining the expected time used in the PERT analysis.

The expected time is the weighted average time of completing a particular activity. The expected time is
based on the average of optimistic time, most likely time and pessimistic time where the assigned points
are 1, 4, and 1 for optimistic, most likely, and pessimistic time, respectively. This assignment of values
is based on the two-tail normal distribution curve. In this two-tail normal distribution, the acceptance
region is assigned 4 points and each tail is assigned a point, thereby a total of 6 points. The formula to
compute the expected time is:
Expected time = (Optimistic time + 4(Most likely time) + Pessimistic time) / 6
If: a = optimistic time
m = most likely time
b = pessimistic time
Then: Expected time = (a + 4m + b) / 6
The strictest measurement of dispersion is the
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Six-sigma

When using PERT, the expected time for an activity when given an optimistic time (a), a pessimistic time (b)
and a most likely time (m), is calculated by which one of the following formulas?
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The expected time is the weighted average time of completing a particular activity. The expected time is
based on the average of optimistic time, most likely time and pessimistic time where the assigned points
are 1, 4, and 1 for optimistic, most likely, and pessimistic time, respectively. This assignment of values
is based on the two-tail normal distribution curve. In this two-tail normal distribution, the acceptance
region is assigned 4 points and each tail is assigned a point, thereby a total of 6 points. The formula to
compute the expected time is:
Expected time = (Optimistic time + 4(Most likely time) + Pessimistic time) / 6
If: a = optimistic time
m = most likely time
b = pessimistic time
 Then: Expected time = (a + 4m + b) / 6

TQM statistical controls - Assessment

An organization has collected data on the complaints made by personal computer users and has
categorized the complaints, as follows:

Using the information collected, the organization should focus on

The number of computer complaints associated with the lack of user knowledge and hardware problems.
The strictest measurement of dispersion is the
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Six-sigma

Valor Company produces a component of a machine. The target value for a key dimension of
the component is 100 millimeters (mm). The quality loss per unit if the key dimension is
measured at precisely the upper or lower specification limit (100mm + 1 mm) is estimated to
be P10.00. The following are the measures of a sample of four units:
Unit Measurement
1 99
2 101
3 99.5
4 100.5

Valor Company produces 1,000 of the components. Based on the sample, the estimated quality loss
is
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The estimated amount of quality loss.
The estimated amount of the quality loss shall be the estimated loss per unit multiplied by the number of
units produced. The estimated loss per unit shall be determined based on the analysis of the samples.
There are four (4) samples observed and the average measurement is 100 mm. The quality loss shall be
based on the variance computed as follows:
Units X T (X – T)² k k(X-T) ²
1 99 100 1.00 P10 P10.00
2 101 100 1.00 10 10.00
3 99.5 100 0.25 10 2.50
 4 100.5 100 0.25 10 2.50
P25.00
whrre: X = actual measurement
T = target measurement
k = cost of quality loss per unit

The average loss per unit is P6.25 (i.e., P25/4), and the estimated total loss is P6,250 (i.e., P6.25 x 1,000
units).

Data processing modes - Assessment

The time interval between the instant at which as instruction control unit initiates a call for data and the
instant at which delivery of the data is completed is:
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Access time.

Program documentation is a control designed primarily to ensure that

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Programs are kept up to date and perform as intended.

In computer operations, data is encoded before processing, can be done by the computer. These statements
refer to batch processing except:
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The method of using the computer system that allows a number of users to execute programs currently and
to interact with the programs during execution.

File structure and management - Assessment

Coding in data processing assigns a unique identification number or key to each data record. Which one of
the following statements about coding is incorrect?
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Secondary keys are used when the primary keys cannot be found.

Bloc codes
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Allow a user to assign meaning to particular segments of a coding software.

An on-line access control that checks whether the user’s code number is authorized to initiate a specific type
of transactions or inquiry is called
Password.

Databases and database management - Assessment

In traditional information systems, computer operators are generally responsible for backing u[p software
and data files on a regular basis. In distributed or cooperative systems, ensuing that adequate backups are
taken is the responsibility of
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User management

In a database, there are often condition that constrain database records. For example, a sales order cannot
exist unless the corresponding customer exists. This kind of constraint is an example of
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Referential integrity.

All of the following are methods for distributing a relational database access multiple servers except
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Normalization (separating the database into logical tables for easier user processing).

The indexed-sequential access method (ISAM) is an approach to the organization

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In which records are stored sequentially in a direct access file and organized by a primary key stored in an
index record.

Two phases of systems planning are project definition and project initiation. All of the following are steps
in project initiation phase except
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Preparing the project proposal.

Before sending or receiving EDI messages, a company should

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Execute a trading partner agreement with each of its customers and suppliers.

A critical aspect of a disaster recovery program plan is to be able to regain operational capability as soon as
possible. In order to accomplish this, an organization can have an arrangement with its computer hardware
vendor to have a fully operational facility available that is configured to the user’s specific needs. This is
best known as a(n)
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Cold site.

To properly control access to accounting database files, the database administrator should ensure that
database system features are in place to permit
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Access only to authorized logical views.

The processing in knowledge-based systems is characterized by

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Heuristics.

Ordinarily, the analysis tool for the systems analyst and steering committee to use in selecting the best
system alternative is
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Cost-benefit analysis.

Preventive controls are

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Usually more cost beneficial than detective controls.

Data processed by a computer system are usually transferred to some form of output medium for storage.
However, the presence of computerized output does not, in and of itself, assure the output’s accuracy,
completeness, or authenticity. For the assurance, various controls are needed. The major types of controls
for this area include
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Tape of disk output controls and printed output controls.

Which of the following is likely to be a benefit of electronic data interchange (EDI)?

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Improved business relationships with trading partners.
A company makes snapshot copies of some often-used data and makes them available in files on the
mainframes. Authorized users can then download data subsets into spreadsheet programs. A risk associated
with this means of providing data access is that
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Data currency many be maintained.

Most of today’s computer systems have hardware controls that are built in by the computer manufacturer.
Common hardware controls are
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Duplicate circuitry, echo check, and dual reading.

To properly control access to accounting database files, the database administrator should ensure that
database system features are in place to permit
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Access only to authorized logical views.

One advantage of database management system (DBMS) is

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The independence of the data from the application programs, which allows the programs to be developed for
the user’s specific needs without concern for data capture problems.

Before sending or receiving EDI messages, a company should

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Execute a trading partner agreement with each of its customers and suppliers.

The indexed-sequential access method (ISAM) is an approach to the organization

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In which records are stored sequentially in a direct access file and organized by a primary key stored in an
index record

Transaction processing systems frequently support the inquiry of online database users. Inquiry processing
includes all of the following characteristics except that
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End-users are allowed to make changes to the records retrieval.

A system that has several minicomputers connected for communication and data transmission purposes but
also enables each computer to process its own data is known as
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Distributed data processing network.
After implementing EDI with suppliers, a company discovered a dramatic increase in prices it paid the
single suppler of some special materials for its primary product line. After consulting with the supplier, the
company determined that the supplier had assumed the risk of not having inventory and raised its prices
accordingly since the company was the only buyer for the special materials. The best approach for
managing inventory in this situation is for the company to
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Gave the supplier more information about expected use of the materials

Which group of characteristics best describes decision support systems?

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Analytical models, programming models, application models, and interactive computer-based modeling
processes.

Batch processing
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Accumulates transaction records into groups for processing against the master file.
Workwell Company operates in several regions, with each region performing its data processing in a
regional data center. The corporate management information systems (MIS) staff has developed a database
management system to handle customer service and billing. The director of MIS recommended that the new
system be implemented in the Southwestern Region to ascertain of the system operates in a satisfactory
manner. This type of conversion is called
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Pilot conversion.

Expert systems consists of

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Software packages with the ability to make judgment decisions.

An employee in the receiving department keyed in a shipment from a remote terminal and inadvertently
omitted the purchase order number. The best systems control to detect this error would be
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Completeness test

The graphic portrayal of the flow of data and the information processing of a system, including computer
hardware, is best displayed in a
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System flowchart.

How is an accounting information system (AIS) distinguished from a management information system
(MIS)?
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An MIS is a subsystem within an MIS.

Which of the following risks is not greater in an electronic fund transfer (EFT) environment than in manual
system using paper transactions?
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Higher cost per transaction.

In a review of an EDI application using a third-party service provided, the auditor should
i. Ensure encryption keys meet ISO standards.
ii. Determine whether an independent review of the service provider’s operation has been
conducted.
iii. Verify that only [public-switched data networks are used by the service provider.
Verify that the service provider’s contracts include necessary clauses, such as the right to audit.
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II and IV.

Most of today’s computer systems have hardware controls that are built in by the computer
manufacturer. Common hardware controls are
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Duplicate circuitry, echo check, and dual reading.

Today organizations are using microcomputers for data presentation because microcomputer use,
compared with mainframe use, is more
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Cost effective.

Communications technology - Assessment

When connecting with two or more electronic mail systems, which of the following is a major
security issue?
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Inability to encrypt messages going between network gateways.

Which of the following is likely to be a benefit of electronic data interchange (EDI)?

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Improved business relationships with trading partners.

A system that permits suppliers and buyers to have direct access to portions of each others’
databases, including inventory data to enhance service and deliveries is
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Electronic data interchange.

An insurance firm uses a wide area network (WAN) to allow agents away from the home office to
obtain current rates and client information and to submit approved claims using notebook computers
and dial-in modems. In this situation, which of the following g methods provide the best data?
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End-to-end data encryption.

A local area network (LAN) is best describe as

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Computer system that connects computers of all sizes, workstations, terminals, and other devices
within a limited proximity.

An electronic meeting conducted between several parties of remote sites is referred to as.
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Teleconferencing.

Large organizations often have their own communication networks for transmitting and receiving voice,
data, and images. Very small organizations, however, are unlikely to be able to make the investment
required by their own networks and are more likely to use
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Public switched lines.

Management of a financial services company is considering strategic decisions concerning the expansion of
its existing local area network (LAN) to enhance the firm’s customer service function. Which of the
following aspects of the expanded system is the least significant strategic issue for management?
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How the expanded system will contribute to the reduction of operating costs.

If a system does not have a mainframe computer or a file server but does processing within a series of
microcomputers, the network is a(n)
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Peer-to-peer program.

An insurance firm uses a wide area network (WAN) to allow agents away from the home office to obtain
current rates and client information and to submit approved claims using notebook computers and dial-in
modems. In this situation, which of the following g methods provide the best data?
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End-to-end data encryption.

An electronic meeting conducted between several parties of remote sites is referred to as.
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Teleconferencing.
The encryption technique that requires two keys, a public key that is available to anyone for encrypting and
private key that is known only to the recipient for decrypting messages is
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Rivest, Shamir and Adelman (RSA)

In distributed data processing, a ring network

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Links all communication channels to form a loop, and each link passes communications through the
neighbor to the appropriate location.

A company has a very large, widely dispensed internal audit program. Management wants to
implement a computerized system to facilitate communications among auditors. The specifications
require that auditors have the ability to place messages in a central electronic repository where all
auditors can access them. The system should facilitate information on a particular topic. Which
type of system would best meet these specifications?
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Electronic bulleted board system.

Which one of the following is considered to be a server in a local area network (LAN)
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A device that stores program and data files for users of the LAN.

The statements below about project feasibility are true except:

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Since data gathering is a basic step in its preparation, all the necessary and required information will always
be available.

The use of message encryption software

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Increased system overhead.
Which of the following statements about a business plan is incorrect?
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A business plan does not contain an executive summary.
The three major activities of system design are
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User interface design, data design, and process design.

The least risky strategy for converting from a manual to a computerized accounts receivable
system would be a
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Parallel conversion.
Which of the following terms best describes a decision support system (DSS)?
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Interactive system.
Most of today’s computer systems have hardware controls that are built in by the computer manufacturer.
Common hardware controls are
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Duplicate circuitry, echo check, and dual reading.